The Enron debacle has already raised legal fees of over $500 million and rising both quicly and daily. But the fee raised by examiner R. Neal Batson of Alston & Bird, of $88 million for a 1,100 page report is – well, gobsmackingly huge. Is the report worth it? Will it help Enron’s creditors regain their lost money?

When does fiscal responsibility come with an $88 million price tag? When a court decides to track down all financial wrongdoing in a massively complex bankruptcy, regardless of the creditors’ strict financial interests.

Alston & Bird’s R. Neal Batson, has submitted bills that rival the total legal and professional fees paid in another large bankruptcy, that of UAL Corp. Can the creditors find answers in those 1,100 pages that boost their recovery enough to justify the report’s cost?

Before that question can be answered, it’s only fair to point out the near-inevitability of the gold-plated Batson report. Bankruptcy courts in recent years have been appointing examiners more frequently, and they are common in the latest run of monster bankruptcies, particularly those where fraud is suspected. The scope of examiners’ duties, and the fees they have charged, vary depending on the case.

Batson’s fees may be unprecedented, but so was the depth of investigation required in the Enron case. Batson received his marching orders when the scandal’s reverberations demanded that no stone be left unturned. For that reason, many experts — including some who say that bankruptcy fees in general are out of control — aren’t criticizing Batson. In fact, most praise his thoroughness, given the complexity of the tangled financial deals responsible for Enron’s rise and fall and the intense economic forensics and discovery work needed.

“He had no choice,” says Robert Rasmussen, a law professor at Vanderbilt University. “Once he decided to take on this obligation, to satisfy all the various constituents he had to say, ‘We tracked down every lead we could.'” The University of Chicago’s Douglas Baird agrees: “If you’re going to pay the market rate for Neal Batson and these people, given the scope of the job they undertook — the fee request may be high, but it’s what people should have been expecting.”

Even Lynn LoPucki of the University of California at Los Angeles, an outspoken critic of rising bankruptcy costs, falls into this camp: “Enron is an unusual case, a bankruptcy that pretty much everybody believes involves fraud, and widespread fraud. … In all likelihood, we still haven’t really gotten to the bottom of this thing.”

The creditors committee hasn’t reacted with alarm. Its attorneys now are concentrating on confirming Enron’s plan to emerge from Chapter 11, says committee counsel Luc Despins, a partner at Milbank, Tweed, Hadley & McCloy. A full analysis of Batson’s fee requests won’t begin until after the final fee application in the case, still months in the future, Despins says.

So what did the creditors get from Batson for their $88 million? Batson was unavailable for comment on his firm’s work. But his report identifies multiple sources besides Enron from which the creditors may be able to collect, including Enron’s outside law firms Vinson & Elkins and Andrews & Kurth, both based in Houston; banks including the Royal Bank of Scotland, Credit Suisse First Boston, Inc., and The Toronto-Dominion Bank; and various Enron executives. The dollar amounts of potential recovery, according to Batson’s report, are in the billions. But the creditors’ ability to collect is still unknown. Even guessing who the potential defendants would be is premature; an estimate of the total recovery is more so.

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